U.S. SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549
                         FORM 10-KSB/A

  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES
             EXCHANGE ACT OF 1934 [Fee Required]
          For the fiscal year ended April 30, 2001
                             OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
      For the transition period from _______________ to
                       _______________

                 Commission File No. 0-9848

                        Initio, Inc.
       (Name of small business issuer in its charter)

                Nevada                        22-1906744
   (State or other jurisdiction of        (I.R.S. Employer
  incorporation or organization)         Identification No.)
        10 Henry Street, Teterboro, NJ          07608
  (Address of principal executive offices)     (Zip Code)

 Issuer's telephone number, including area code: (201) 462-9000

 Securities registered pursuant to Section 12(b) of the Act:
                            None

 Securities registered pursuant to Section 12(g) of the Act:
                Common Shares, $.01 par value

                      (Title of Class)

  Check whether the issuer (1) filed all reports required to
be  filed by Section 13 or 15(d) of the Exchange Act of 1934
during  the preceding 12 months  (or for such shorter period
that the registrant was required to file such reports),  and
(2) has been subject to the filing requirements for the past
90 days.
             Yes X    No _____
  Check  if  there is no disclosure of delinquent filers  in
response to Item 405 of Regulation S-B in this form, and  no
disclosure  will  be contained, to the best of  registrant's
knowledge,  in  definitive proxy or  information  statements
incorporated by reference in Part III of this Form 10-KSB or
any amendment to this Form 10-KSB.  [  ]

  State Issuer's Net Revenues for its most recent fiscal year: $652,163.

  State the aggregate market value of the voting stock  held
by non-affiliates of the registrant:  $2,306,389 (based upon
the  average bid and asked price of the registrant's  Common
Shares, $.01 par value, as of July 21, 2001).

  State  the  number of shares outstanding of  each  of  the
issuer's  classes  of  common  equity,  as  of  the   latest
practicable date.

Common Shares, $.01 Par Value   4,646,004
  (Title of Class)         (No. of Shares Outstanding
                              at August 1, 2001)

         DOCUMENTS INCORPORATED BY REFERENCE:  None
Transitional Small Business Disclosure Form (check one):
                         Yes___    No   X

Item 1. Description of Business.

  (a) General Development of Business.
      Initio, Inc. (the "Company") was incorporated under the laws  of  the
State  of Delaware in 1968 and became a publicly-owned corporation in 1970.
Effective  as  of  February  1,  1994, the Company  changed  its  State  of
incorporation from Delaware to Nevada.  The Company's principal offices are
located at 10 Henry Street, Teterboro, NJ 07608 and its telephone number is
(201) 462-9000.

      Prior  to  April  30,  1999, the Company,  through  its  wholly-owned
subsidiary,  Initio  Acquisition  Corp. (formerly  Deerskin  Trading  Post,
Inc.),  was  engaged  in the mail order retail sale  of  consumer  products
principally  through  mail order catalogs, and to a lesser  extent  through
media advertising.
RECENT DEVELOPMENTS

On July 20, 2000 the Company entered into a merger agreement with Inculab,
Inc. (a Delaware corporation).  Inculab is a company, which invests in high
tech early stage companies and is in the process of building a high tech
launch center in Manhattan, which will market space as well as professional
consulting and financial services to internet and other high tech early
stage companies.  This agreement was terminated during the current fiscal
year and the Company was paid a break up fee of $350,000.


Sale  of  Initio  Acquisition Corp. Assets.  On May 21, 1999,  the  Company
completed  the  sale of certain operating assets pertaining to  the  direct
mail  and  e-commerce  business  (the  "Mail  Order  Business")  of  Initio
Acquisition  Corp., to Americas Shopping Mall, Inc. ("ASM").   The  assets,
which  were  sold  as  of  the close of business on  April  30,  1999  (the
"Effective Date") included:

           (i)  all inventory related to the Mail Order Business as of  the
Effective Date;
          (ii)  pre-paid advertising;
          (iii) other prepaid expenses;
           (iv)  all of Initio Acquisition Corp.s fixed assets as  of  the
Effective  Date located in Carson City, Nevada, Teterboro, New  Jersey  and
Danvers,  Massachusetts, excluding certain assets set forth  in  the  Asset
Purchase  Agreement dated April 21, 1999 between Initio  Acquisition  Corp.
and ASM;
          (v)  certain accounts receivable;
           (vi) all security deposits as of the Effective Date held by  the
lessors  in  connection with the leases of the Teterboro,  New  Jersey  and
Danvers,   Massachusetts  facilities  as  well  as  all  utility   deposits
maintained by Initio Acquisition Corp.;
           (vii)   all  agreements  material to operating  the  Mail  Order
Business;
          (viii)  customer lists;
          (ix)  separations, photographs and other material relating to the
preparation  or  printing of artwork used in the Mail  Order  Business  and
Initio Acquisition Corps. e-commerce business;
           (x)   Initio  Acquisition Corp. proprietary mail order  computer
software systems;
           (xi)   all right, title and interest of Initio Acquisition Corp.
in  trademarks, copyrights, service marks, trade names, domain names  using
the  words  "Deerskin",  "Joan  Cook" and  variations  thereof,  and  other
intellectual   property  rights,  together,  in   each   case,   with   all
registrations, applications, recordings, reissuances, extensions, renewals,
licenses  and  rights,  if any, and all claims against  third  parties  for
violation or infringement of any thereof, together with the goodwill of the
Mail Order Business;




           (xii)   all unshipped orders from customers as of the  Effective
Date  and  credit  card numbers (and the right to collect  monies  pursuant
thereto) which customers have tendered in payment for such Unfilled Orders;
           (xiii)   Initio Acquisition Corp. books of account and  records,
licenses,   permits,  sales  and  manufacturing  data,  software  programs,
computer  printouts,  data  bases and related  items,  and  other  records,
documents  and instruments relating to the acquired assets and  all  copies
thereof.

           The purchase price received for the assets was approximately  $6
million (the "Purchase Price"). The Purchase Price was paid as follows:

           (a)   $2  million  of  the  Company's  convertible  subordinated
debenture   held   by  Pioneer  Ventures  Associates  Limited   Partnership
("Pioneer") was repaid;
           (b)   ASM  issued  to  Initio Acquisition  Corp.  a  Convertible
Debenture  due  June 1, 2004 in the principal amount of $3.4  million.  The
Convertible Debenture bears interest at a rate of 8% per annum, payable  on
the  last day of each July, October, January and April until June 1,  2004,
when the Convertible Debenture is to be redeemed by ASM.  The Debenture  is
convertible into shares of ASM common stock; and
          (c)  approximately $500,000 cash.

Issuance  of  Second  Subordinated Convertible  Note  to  Pioneer  Ventures
Associates  Limited Partnership.  In December 1998 the Company pursuant  to
the  terms  of that agreement, the Company issued to Pioneer a  convertible
subordinated debenture in the principal amount of $500,000, convertible  at
$1.54  per share, with interest at 8% per annum.  These funds were used  by
the Company for certain specified purposes including Internet activities.

Sale  of  Peabody,  Massachusetts  Property.   In  May  1999,  the  Company
culminated  the sale of its Peabody plant, included in the  net  assets  of
discontinued operations, for $525,000 in cash and notes, resulting in a pre-
tax gain of $ 200,000.

Americas  Shopping  Mall Inc. Is currently in default  of  the  payment  of
interest and The Company has taken a reserve for possible loss on this note
of $2,000,000.

(b) Narrative Description of the Business.

      The  Company,  via  its  Initio  Acquisition  Corp.  subsidiary,  was
principally  engaged  in  the  mail order and  e-commerce  retail  sale  of
consumer  products  through its Deerskin and Joan Cook catalogs  and  to  a
lesser  extent  through  media advertising. In  April,  1999,  the  Company
entered  into  an  agreement to sell materially all of the  assets  of  its
Deerskin operation. In May, 1999, the transaction closed resulting in a pre-
tax  gain  of  approximately $2,400,000.  Since that time, the Company  has
begun the process of identifying new business opportunities.

Employees.  The Company currently has 4 full-time employees.  None  of  the
Company's  employees are covered by collective bargaining agreements.   The
Company considers its employee relations to be satisfactory.





Item 2. Description of Property.

The Company's operations are conducted in the following facilities:

Location                 Use

Teterboro, NJ                 Administrative and Executive Offices

The  Company owns an approximately 81,000 square foot building on 7.5 acres
of  leased land in Carson City, Nevada.  Annual rent for this land is $700.
The  lease  expires on September 30, 2037.  The Company is responsible  for
real estate taxes on this property.
can  be no assurance that when the property is sold we will in fact receive
$3.6 million for the property.  Initio, Inc. also maintains an office at 10
Henry  Street,  Teterboro, NJ, where it has a one year  lease  expiring  in
August  2001  at $35,000 per annum and occupies approximately  6000  square
feet.

The  Company considers that, in general, its physical properties  are  well
maintained,  in  good  operating condition and  adequate  for  its  present
purposes.

Item 3. Legal Proceedings.

In  November, 2000, the Company learned that a default judgement  had  been
entered  against Deerskin Trading Post, Inc.(now Initio Acquisition  Corp.)
On August 28th, 2001, this matter was settled for $51,000.  The Company had
established  a reserve of $50,000 on our financial statement for  the  year
ended April 30th, 2001.
As  of August 1, 2001 there were no other legal proceedings pending against
the  Company, nor to the Company's knowledge, were any material proceedings
against it contemplated by any governmental authority.

Item 4. Submission of Matters to a Vote of Security Holders

On April 26, 2001, the Company's Annual Meeting of Shareholders was held at
the offices of the Company. A quorum, in person or by proxy, of common
stockholders was present throughout. The following matters were voted upon:

Election of Directors - The following persons were nominated, seconded and
elected by vote of security holders, as follows:

          Name           Number of Votes For Votes Withheld

     James J. Holzinger       4,490,469           0
     Dr. Paul Lerman          4,490,469           0

The selection of Arthur Andersen LLP as the Company's auditors for the 2001
fiscal year was ratified with a vote of 4,490,269 in favor, 200 opposed and
0 abstentions.


                                  PART II

Item 5. Market for Registrant's Common Equity and Related
    Stockholder Matters.

  (a) Market Information.  The Company's Shares are traded under the symbol
"INTO"  on Nasdaq. The following table indicates high and low bid  for  the
fiscal  years ended April 30, 2001 and 2000 in the over-the-counter  market
for  the periods indicated based upon information supplied by Nasdaq.  Such
over-the-counter  market  quotations reflect inter-dealer  prices,  without
retail  mark-up,  markdown or commission and may not necessarily  represent
actual transactions:



Fiscal Year Ended          April 30, 2001    April 30, 2000
                              Bid:                Bid:
                           High   Low         High      Low
  First Quarter           5.25   2.0625      2.156     1.281
  Second Quarter          5.0625 2.35        2.406     1.187
  Third Quarter           2.9062 1.4375      1.4375    1.0312
  Fourth Quarter          1.75   1.2812      3.1250    1.0312

  (b)   Number of Holders of Common Stock.  As of April 30, 2001 the number
of  record holders of the Company's Shares was approximately 294, which may
not include all individual participants in security position listings.

  (c)   Dividends.   The  Company has never paid a cash  dividend.   Future
dividend policy will be determined by the Board of Directors based  on  the
Company's  earnings,  financial condition, capital requirements  and  other
existing  conditions.  It is anticipated that cash dividends  will  not  be
paid to the holders of shares in the foreseeable future.

Item  6.  Management's Discussion and Analysis of Financial  Condition  and
Results of Operations follow on page 11 .

Item 7. Financial Statements.

Financial Statements, follow on page 13.

Item 8. Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure.

During  fiscal  years  2001 and 2000 there were no disagreements  with  the
Company's  principal  independent accountants on  accounting  or  financial
disclosure.
In  July 2001 the Company changed its auditors from Arthur Andersen LLP to
Rogoff & Co. PC.

                  PART III

Item 9. Directors and Executive Officers of the Company

  The Company's Board of Directors is a classified board, with one-third of
the  directors  being  elected each year for a term of  three  years.   The
following  table  sets  forth  certain information  with  respect  to  each
director and executive officer of the Company:

Name and Age             Positions with      Term      Served As
                         the Company         Expires   Director
                                                       Since

Daniel A. DeStefano, 69  Chairman of the      2003     1969
                         Board, Director

Martin Fox, 66           President, Secretary,
                         Director             2003     1978

Dr. Paul Lerman,* 60     Director             2001     1998

James J. Holzinger,* 66  Director             2001     1998

Robert Lerman,* 65       Director             2002     1998

Paul  Lerman  and  Robert Lerman are cousins and are  nominees  of  Pioneer
Venture Associates Limited Partnership.

Mr.  DeStefano  was a founder of the Company and has been Chairman  of  the
Board of the Company since 1969.

Mr.  Fox  joined the Company in 1972 and has been President of the  Company
for more than five years.

Mr.  Holzinger  is,  since 1996, retired.  From 1993  -  1996,  he  was  an
Executive  Vice  President in the commercial lending department  of  Summit
Bank.

Mr.  Lerman  became a Director in February, 1998. Since 1998, he  has  been
president and a Director of Pioneer Ventures Corp., which is the manager of
the  general  partner  of Pioneer Ventures Associates Limited  Partnership.
Mr.  Lerman is also the President and a Director of Pioneer Partners Corp.,
the  general  partner  of  an investment partnership,  Bridge  Investors  I
Limited Partnership for more than five years.

Dr. Lerman became a Director of the Company in April, 1999.  Dr. Lerman has
been the Dean of the Samuel J. Silberman College of Business Administration
at  Fairleigh Dickinson University since 1988 and a Professor  of  Business
Administration since 1990.

Each  officer's  term  expires  at each annual  meeting  of  the  Board  of
Directors  of  the  Company,  or  when their  successors  are  elected  and
qualified to serve in their stead.

The  Company  pays  directors, other than full time  employees,  an  annual
retainer  of  $3,000 plus $500 and out-of-pocket expenses  for  each  Board
meeting attended.

  * Member of the audit committee

Item 10. Executive Compensation.

      The  following  table  sets forth the cash  compensation  (consisting
entirely  of salary) paid (or accrued for) by the Company to its  President
and  Chairman  of  the  Board.   None of the executive officer's  aggregate
remuneration exceeded $100,000, for the Company's fiscal years ended  April
30, 2001 and 1999:

SUMMARY COMPENSATION TABLE

Name and
Principal
Position                      Year Annual Compensation

Martin Fox, President         2001   $ 36,000
                              2000   $150,000
                              1999   $  1,500


Daniel DeStefano,             2001   $ 36,000
Chairman of the Board         2000   $150,000
                              1999   $  1,500

March  25, 1998, the Company granted 250,000 stock options each to Mr.  Fox
and  Mr.  DeStefano at an exercise price of $1.95 pursuant to the Company's
1996  Employee  Stock Option Plan.  These options are  exercisable  to  the
extent  of  80%  with  an  additional 20% exercisable  on  March  25,  2002
presently.  Neither  Mr. Fox nor Mr. DeStefano have any  other  outstanding
stock options or stock appreciation rights.

The  Company does not have employment agreements with any of its  executive
officers.

The  Company has two stock option plans, the 1991 Stock Option Plan ( 1991
Plan  )  and the 1996 Stock Option Plan ( 1996 Plan ). Under both  Plans
options  to  buy  the  Companys common stock  have  been  granted  to  key
employees and / or directors of the Company, for terms ranging from five to
ten years and which become exercisable at fixed times.


Options,  which may result in the issuance of up to 500,000 shares  of  the
Companys common stock, may be issued pursuant to the 1996 Plan.  Under  to
the  1996 Plan the Company may award either Incentive Stock Options or  Non
Qualified  Stock Options.  The terms for either may not exceed  ten  years,
while  vesting  is  either  20 % annually or  as  the  Companys  Board  of
Directors  provides. Exercise prices approximate the market price  for  the
Companys  stock, except that in the case of award to holders of more  than
10  %  of  the  Companys stock the exercise is to be set by the  Companys
Board  of  Directors.   Arising from the disposal of  all  of  its  catalog
operations,  the  Company decided that all employees  of  Deerskin  Trading
Post,  Inc., a wholly owned subsidiary of the Company who had stock options
on  shares of Initio common stock, would be fully vested effective upon the
closing  of  the transaction between Deerskin Trading Post, Inc.  and  ASM.
All such persons had until April 30, 2000 to exercise such options.


Item 11. Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Certain Beneficial Owners.  The following table  sets
forth, as of July 15, 2001, information concerning the only persons who are
known  by  the  Company to own beneficially more than five percent  of  the
outstanding  Shares of the Company and information concerning ownership  of
outstanding Shares by all current directors and executive officers  of  the
Company  as a group.  Except as otherwise indicated, all such persons  have
both  sole  voting  and  investment power over the Shares  shown  as  being
beneficially owned by them.


Name and Address of               Amount and Nature    Percent of
Beneficial Owner                    Of Beneficial      Ownership Class

Martin Fox
2500 Arrowhead Drive
Carson City, Nevada 89706           1,441,085 (1)         29.7%

Daniel A. DeStefano
2500 Arrowhead Drive
Carson City, Nevada 89706             840,010 (2)         17.3%

DeStefano Children Trust
c/o John McConeghy
42 Sterling Lane
Wayne, New Jersey 07470               530,546 (3)         11.4%

Melvyn I. Weiss
One Pennsylvania Plaza
New York, New York 10119              248,650 (4)          5.4%

Pioneer Ventures Associates
  Limited Partnership
651 Day Hill Road
Windsor, Connecticut 06095            724,675 (5)         13.5%

Robert Lerman
651 Day Hill Road
Windsor, Connecticut 06095            740,130 (6)         13.8%

James J. Holzinger
7 Canterbury Way
Wayne, New Jersey 07470                10,000          Less than 1%

Dr. Paul Lerman
1000 River Ro
Teaneck, New Jersey 07666                --                --

All Executive Officers and
Directors as a Group (5 persons)    3,031,225 (7)         52.5%


 (1) This amount includes 101,984 Shares owned by trusts for the benefit of
Mr.  Fox's  children of which Mr. Fox is a trustee and  of  which  Mr.  Fox
disclaims  beneficial ownership.  Mr. Fox has shared voting and  investment
power  over  the  Shares owned by such trusts.  This amount  also  includes
101,796 Shares owned by the Martin Fox Retirement Trust.  This amount  does
not  include  53,433 Shares owned by a trust for the benefit  of  unrelated
persons  of  which  Mr.  Fox is a trustee and of which  Mr.  Fox  disclaims
beneficial ownership. This amount also includes 200,000 shares,  which  Mr.
Fox  has  the  right  to acquire pursuant to a currently exercisable  stock
option.

(2)  This  amount  includes 172,638 Shares owned by  the  Daniel  DeStefano
Retirement  Trust.  This  amount also includes 200,000  shares,  which  Mr.
DeStefano  has  the  right to acquire pursuant to a  currently  exercisable
stock option.

(3)  Owned  by  the  DeStefano  Children  Trust  for  the  benefit  of  Mr.
DeStefano's  adult  children,  of  which  the  trustees  are  Messrs.  John
McConeghy and Fred DeStefano (Mr. Daniel A. DeStefano's brother).

(4)  This  amount  also includes 101,984 Shares owned  by  trusts  for  the
benefit of Mr. Fox's adult children of which Mr. Weiss is a trustee and  of
which  Mr.  Weiss  disclaims beneficial ownership.  Mr.  Weiss  has  shared
voting and investment power over the Shares owned by such trusts.

(5)  Pioneer  Ventures Associates Limited Partnership is  the  owner  of  a
$1,000,000 convertible subordinated debenture which is convertible  into  a
maximum  of  400,000 shares of the Company's common stock  and  a  $500,000
convertible subordinated debenture which is convertible into a  maximum  of
324,675 shares of the Company's common stock.

(6)  This  amount  includes (i) 400,000 shares which  may  be  acquired  by
Pioneer  Ventures  Associates Limited Partnership upon  conversion  of  the
Convertible  Subordinated Debenture due May 1, 2003,  (ii)  324,675  shares
which  may  be acquired by Pioneer Ventures Associates Limited  Partnership
upon conversion of the Convertible Subordinated Debenture due December  23,
2003,  (iii) 4,400 shares held by Robert and Ellen Lerman, (iv)  1,960  and
3,500  shares  held by Texas Enterprises, Inc. and Pioneer  Capital  Corp.,
respectively, of which Mr. Lerman is the owner of 50% of the issued  shares
of  such corporations, (v) 5,495  shares held by the Robert A. Lerman Money
Pension  Plan & Trust, and (vi) 100 shares held by Ellen Lerman, his  wife.
See "Certain Relationships and Related Transactions."

(7)  See  footnotes  (1), (2) and (6) above.  This amount  includes  10,000
shares owned by Mr. Holzinger.

Item 12. Certain Relationships and Related Transactions

On  February  25,  1998, the Company entered into the Debenture  Commitment
Agreement  with  Pioneer Ventures Associates Limited Partnership  ("PVALP")
pursuant to which PVALP has agreed to make certain loans to the Company  to
be  repaid  by  the  Company in accordance with the  terms  of  convertible
subordinated   debentures  (the  "Debentures").   PVALP  initially   loaned
$3,000,000  to  the  Company and the Company issued the First  Subordinated
Debenture  due May 1, 2003 (the "First Debenture").  In May 1999  this  was
reduced to 1,000,000 and is presently convertible at $2.50 per share.

The  terms of the First Debenture include the condition that the  principal
stockholders of the Company (the "Principal Stockholders"), which   include
Mr. DeStefano and Mr. Fox, enter into the Voting Agreement.

The  Voting  Agreement  provides  that so  long  as  there  is  any  unpaid
principal amount or interest outstanding under the Debentures or so long as
the  conversion  shares are held by PVALP, the Principal Stockholders  will
vote  all of their Common Stock for the election of PVALP's designee  as  a
director  of the Company.  Mr. Robert Lerman, a director of the Company  is
PVALP's  nominee, and the President of Pioneer Ventures Corp., the managing
member  of  the general partner of PVALP.  In addition, in the event  of  a
default   under   the   Debenture  Commitment  Agreement,   the   Principal
Shareholders  agree  to  elect that number of  nominees  to  the  Board  of
directors  designated  by PVALP such that the Board  of  Directors  becomes
comprised  of  a majority of nominees of PVALP.  The Principal Shareholders
also  agree to vote in favor of the PVALP nominees so long as any  interest
or principal remains unpaid.

The  Voting Agreement also provides that the Principal Shareholders may not
transfer  any  Common Stock to any affiliate without PVALP's prior  written
consent.  "Affiliate" is defined in the Voting Agreement as (a) any spouse,
parent,  parent-in-law,  grandparent,  grandchild,  sibling,  uncle,  aunt,
niece, nephew or first cousin of the transferor or (b) any person which the
transferor directly or indirectly controls or (c) any transfer to a  person
if  the  transferor remains a beneficial owner, as that  term  is  used  in
Section 13 (d) of the Securities Exchange Act of 1934, as amended,  of  the
transferred shares.

On  December  23, 1998, the Company pursuant to the terms of the  debenture
Commitment  Agreement, the Company issued to Pioneer the Second Convertible
Subordinated  Debenture due December 23, 2003, in the principal  amount  of
$500,000,  convertible at $1.54 per share, with interest at 8%  per  annum.
These  funds  were  used  by  the Company for  certain  specified  purposes
including Internet activities.


Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits.  See Index of Exhibits annexed hereto.

   (b) Reports on Form 8-K

The  Company  did  not  file any Current Reports on  Form  8-K  during  the
quarterly period ended April 30, 2000.


                                SIGNATURES


  Pursuant  to  the requirements of Section 13 or 15(d) of  the  Securities
Exchange  Act  of 1934, the Registrant has duly caused this  report  to  be
signed on its behalf by the undersigned, thereunto duly authorized.

Date:  July 28, 2001     INITIO, INC.


                   /s/ Martin Fox
                   By: Martin Fox, President


Pursuant  to the requirements of the Securities Exchange Act of 1934,  this
report  has  been signed below by the following persons on  behalf  of  the
Registrant and in the capacities and on the dates indicated.


Date:  July 28, 2001     /s/ Martin Fox
                   Martin Fox,
                   President and Director


Date:  July 28, 2001     /s/ Daniel DeStefano
                   Daniel DeStefano,
                   Chairman of the Board
                   and Director


Date:  July 28, 2001     /s/ Paul Lerman
                   Dr. Paul Lerman,
                   Director


Date:  July 28, 2001     /s/ Robert A. Lerman
                   Robert A. Lerman,
                   Director


Date: July 28, 2001 /s/ James J. Holzinger
                   James J. Holzinger,
                   Director

               INDEX OF EXHIBITS


(3)  (a)  Articles  of  Incorporation of the  Company  --  incorporated  by
reference to Exhibit 3(a) to the Companys Registration Statement  on  Form
SB-2 (File No. 33-57750) filed on February 1, 1993 (the SB-2).

 (b) By-Laws of the Company -- incorporated by reference to Exhibit 3(b) to
the SB-2.

  (c)  Certificate  of  Ownership and Merger of Initio,  Inc.,  a  Delaware
corporation  and  Initio,  Inc., a Nevada corporation  (the  "Company")  --
incorporated by reference to Exhibit 2(e) to the SB-2.

(10)  (a)  1991  Stock Option Plan, adopted by the Board  of  Directors  on
November  8,  1991  and  by  the  shareholders  on  December  20,  1991  --
incorporated   by  reference to Exhibit 10(a) to the  SB-2  (This  document
represents a  compensatory plan).

  (b)  Lease of Land under the Company's premises at 2500 Arrowhead  Drive,
Carson City, Nevada -- incorporated by reference to Exhibit No. (20)(b)  to
the Company's Annual Report on Form 10-K for the fiscal year ended February
6, 1981.

 (c) 1996 Stock Option Plan

  (d) Debenture Commitment Agreement, dated as of February 25, 1998, by and
between  the  Company and PVALP incorporated by reference to  Schedule  13D
dated February 25, 1998 filed by Martin Fox.

  (e)  Convertible Subordinated Debenture due May 1, 2003  incorporated  by
reference to Schedule 13D dated February 25, 1998 filed by Martin Fox

  (f) Voting Agreement, dated as of February 25, 1998, by and between PVALP
and  the  Principal Stockholders incorporated by reference to Schedule  13D
dated February 25, 1998 filed by Martin Fox.

  (g) Convertible Subordinated Debenture due December 23, 2003 incorporated
by reference to Schedule 13D dated December 23, 1998 filed by Martin Fox.

   (h)  Asset  Purchase  Agreement  between  Deerskin  Trading  Post,  Inc.
("Deerskin") and Americas Shopping Mall, Inc. ("ASM") dated April 21,  1999
incorporated  by reference to Exhibit 10.1 to the Company's Current  Report
on Form 8-K filed June 3, 1999.

  (i)  Convertible Debenture due June 1, 2004 incorporated by reference  to
Exhibit  10.2  to the Company's Current Report on Form 8-K  filed  June  3,
1999.

  (j)  Security  Agreement between Deerskin and ASM,  dated  May  21,  1999
incorporated  by reference to Exhibit 10.3 to the Company's Current  Report
on Form 8-K filed June 3, 1999.

 (k) Agreement and Plan of Merger and Reorganization dated July 20, 2000 by
and among Initio, Inc., Saturn Acquisition Corp., Inculab, Inc. and Certain
Shareholders.

(21) List of Subsidiaries -- incorporated by reference to Exhibit 21 to the
SB-2.



                 Initio, Inc.

Managements Discussion and Analysis of Financial Condition and the Results
of Operations

The following discussion and analysis provides information which management
believes  is  relevant to an assessment and understanding of the  Companys
results  of  operations and financial condition. The discussion  should  be
read  in  conjunction  with the Companys Financial  Statements  and  Notes
thereto.

Managements discussion and analysis contains forward looking  statements
about the Companys future prospects. These statements are subject to risks
and  uncertainties, which could cause actual results to  differ  materially
from  those expected by Management. Readers are therefore cautioned not  to
rely  upon  on  any  such forward-looking beliefs or  judgments  in  making
investment decisions.

Results of Operation
In fiscal year 2001 revenues decreased to $652,163 from $1,061,115.  This
decrease was the result of the decrease in rental income from $336,000 in
fiscal 2000 to $38,000 in fiscal 2001.  The purchaser of the companys
previously owned catalog companies had been renting the premises in Carson
City, NV, (which are presently being held for sale), until June of 2000, at
which time the present premises became vacant and consequently the rental
income has ceased.  Since it is the companys intention to sell the
property, it has not attempted to rent the property as it is managements
opinion that such a rental would possibly interfere with a sale of the
property.  Also, in lieu of a gain of $280,309 on marketable securities in
fiscal 2000 the company had a realized loss of $93,439 in fiscal 2001.

Administrative expenses decreased to $544,025 in fiscal 2001 from $676,812
in the prior year as a result of the significant reduction in executive
compensation from $300,000 in fiscal 2000 to $72,000 in fiscal 2001;
substantially offset by significantly increased legal and professional fees
in fiscal 2001, which arose in connection with the attempted acquisition of
Inculab, Inc.  The current fiscal year reflects a loss on the sale of
discontinued operations, net of income tax benefit, of ($1,580,200) vs. a
gain, also net of income taxes, of $1,841,300 in the prior year.

As a result of all of the foregoing, for the year ended April 30, 2001 the
company showed a net loss of ($2,105,626) vs. a gain of $2,814,360 in the
prior year.


Liquidity and Financial Resources
As  of  April  30,  2001,  the cash balances were $358,616  and  marketable
securities valued at current market prices were approximately $2,326,145.



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of Initio, Inc.:

We  have  audited the accompanying consolidated balance sheets  of  Initio,
Inc. (a Nevada corporation) and subsidiaries as of April 30, 2001, and  the
related  consolidated  statements  of operations  and  comprehensive  loss,
changes  in  shareholders equity and cash flows for the year ended.   These
financial  statements  are the responsibility of the Company's  management.
Our  responsibility is to express an opinion on these financial  statements
based  on  our  audit.   The  consolidated  statements  of  operations  and
comprehensive income, changes in stockholders equity and cash flows for the
year  ended  April  30, 2000, were audited by other auditors  whose  report
dated July 20, 2000 expressed an unqualified opinion on those statements.

We  conducted  our  audits in accordance with auditing standards  generally
accepted  in the United States.  Those standards require that we  plan  and
perform  the  audit  to  obtain  reasonable assurance  as  to  whether  the
financial statements are free of material misstatement.  An audit  includes
examining, on a test basis, evidence supporting the amounts and disclosures
in  the  financial  statements.   An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as
well  as  evaluating  the  overall financial  statement  presentation.   We
believe that our audits provide a reasonable basis for our opinion.

In  our opinion, the financial statements referred to above present fairly,
in  all  material respects, the financial position of Initio,  Inc.  as  of
April 30, 2001, and the consolidated results of its operations and its cash
flows  for  the years then ended, in conformity with accounting  principles
generally accepted in the United States.





August 1, 2001



Rogoff & Co. P.C.
New York, New York


                               Initio, Inc.
        Consolidated Statement of Operations and Comprehensive Loss
                            For the Year Ended


                                        April 30, 2001           April 30, 2000


Revenues:
  Interest and dividends                     $  354,088               $ 396,750
  Gain (loss) on the sale of
    marketable securities                       (93,439)                280,309
    Rental Income                                38,000                 336,000
    Break up fee                                350,000                       -
    Other                                         3,514                  48,056
                                                652,163               1,061,115

Expense
  General and Administrative                    544,025                 676,812
  Interest                                      193,598                 234,543
                                                737,623                 911,355


Income (loss) from continuing operations
    Before income taxes                         (85,460)                149,760

Income tax benefit, net                        (439,966)                823,300

Income from continuing operations              (525,426)                973,060


Gain (loss) on sale of discontinued operations,
  net of income tax (benefit) of ($419,800)
  and $489,238, respectively                 (1,580,200)              1,841,300

Net income (loss)                            (2,105,626)              2,814,360

Other comprehensive income (loss):
  Unrealized gains (losses) on
  Marketable securities:
    Arising during the period                  (497,510)                 58,564
  Reclassification of gains (losses)
    Realized in other income                   (118,239)                (56,567)
                                               (615,749)                  1,997
 Comprehensive Income (Loss)                $(2,721,375)            $ 2,816,357


                               Initio, Inc.
        Consolidated Statement of Operations and Comprehensive Loss
                            For the Year Ended

Earnings per common share
      Basic:
      Continuing operations                      ($0.11)                  $0.21
      Income (loss) from discontinued
        operations                               ($0.34)                  $0.40
        Net income (loss)                        ($0.45)                  $0.61
      Diluted:
      Continuing operations                      ($0.11)                  $0.20


      Income (loss) from discontinued
        operations                               ($0.34)                  $0.37
        Net income (loss)                        ($0.45)                  $0.57

Weighted Average Shares
      Basic                                    4,645,744              4,640,783
      Diluted                                  4,645,744              4,965,833

 The accompanying notes are an integral part of these financial statements.



                               Initio, Inc.
                              Consolidated Balance Sheets
                                   As at

                                    April 30, 2001          April 30, 2000

Assets

  Cash                                  $  358,616              $  550,025
  Marketable Securities                  2,326,145               2,938,282
  Deferred tax asset                     1,236,596               1,261,762
  Building and improvements,net                  -               1,493,120
  Vehicles and equipment, net               20,531                  24,155
  Building held for sale                 1,493,120                     -
  Convertible debenture                  1,000,000               3,000,000
  Notes receivable                         482,561                 446,841
  Other assets                              42,744                  24,471
    Total assets                        $6,960,313              $9,738,656


Liabilities and Stockholders' Equity

  Liabilities:
 Accounts Payable and Accrued expenses     171,737                 109,286
  Income taxes payable                           -                  45,000
  Mortgage payable                         778,158                 825,577
  Other liabilities                              -                  28,000
  Subordinated convertible debenture     1,500,000               1,500,000
     Total liabilities                   2,449,895               2,507,863

  Commitments (notes 7 & 10)

  Stockholders' Equity
  Common stock, $.01 par value, Authorized
  10,000,000 shares, 5,053,575 issued and
  4,646,004 outstanding shares, 5,052,575
  issued and 4,645,004 outstanding shares,
    respectively                            50,536                   50,526
  Additional paid in capital             8,653,660                8,652,670
  Accumulated deficit                   (3,117,574)              (1,011,948)
  Accumulated other comprehensive
    income                                (498,467)                 117,282
                                         5,088,155                7,808,530

  Less: Treasury stock, 407,571
    Common shares                         (577,737)                (577,737)
      Total stockholders' equity         4,510,418                7,230,793
      Total liabilities and
       stockholders' equity             $6,960,313               $9,738,656


     The  accompanying  notes  are  an integral  part  of  these  financial
statements.




                                                               Accumulated
                  Issued Common   Paid In Accumulated Treasury Comprehensive
                  Shares  Stock   Capital    Deficit    Stock  Income     Total
Balance        5,065,406 50,654 8,616,042 (3,826,308)(577,955)115,285 4,377,718
May 1, 1999

Cancellation     (11,167)  (112)  (25,438)                              (25,550)
of shares by
employee to
repay loan

Purchase and      (5,000)   (50)   (5,126)                               (5,176)
retirement of
5,000 shares

Exercise of       25,163    252    67,192                                67,444
employee stock
options for
51,915 shares

Retirement of    (21,827)  (218)                          218
21,827 treasury
shares

Other comprehensive                                            1,997     1,997
income

Net income                                 2,814,360                  2,814,360

Balance        5,052,575 50,526 8,652,670 (1,011,948)(577,737)117,282 7,230,793
Apr 30, 2000

Exercise of        1,000     10       990                                 1,000
employee stock
options for
1,000 shares

Other compreh                                                 615,749) (615,749)
loss

Net loss                                  (2,105,626)                 2,105,626)

Balance        5,053,575 50,536 8,653,660 (3,117,574)(577,737)498,467)4,510,418
Apr 30, 2001

 The accompanying notes are an integral part of these financial statements.

                     Initio, Inc.
             Consolidated Statements of Cash Flows
                    For the Year Ended


                                           April 30, 2001       April 30, 2000

Cash flows from Operating Activities;

  Net Income (loss)                           $(2,105,626)          $2,814,360
  Adjustments to reconcile net income
  to net cash used in operating
  activities:
  (Gain) loss on sale of discontinued
  operations                                    2,000,000           (2,330,538)
  (Gain) loss on sale of marketable
   securities                                      93,439             (280,309)
  Depreciation and amortization                     6,908               67,434
  Stock option compensation                          -                  47,319
  Deferred tax expense (benefit),net              (25,166)            (377,762)
  Net increase in net assets of
   discontinued operations                           -                (340,026)
  Net increase in other assets                    (18,273)              (9,607)
  Net increase (decrease) in other liabilities    (10,549)             141,509

Net cash used in operating activities              (8,935)            (267,620)

Cash flows from Investing Activities

  Proceeds from sale of discontinued
   operations                                         -                552,328
  Proceeds from sale of Peabody
   facility                                           -                253,080
  Purchases of property and equipment              (3,284)             (78,257)
  Proceeds from collection of
    convertible debenture                             -                400,000
  Net proceeds from Sales/(purchases)
   of marketable securities                       (97,051)          (1,447,915)
  Increase in notes receivable                    (35,720)             (11,336)

  Net cash used in Investing activities          (136,055)            (332,100)


Cash flows from Financing Activities

  Mortgage repayment                              (47,419)             (48,197)
  Net proceeds from issuance of
  common stock                                      1,000               20,125
  Treasury stock repurchased and
   retired                                            -                 (5,176)

Net cash used in financing activities             (46,419)             (33,248)


                                           April 30, 2001       April 30, 2000

Net decrease in cash                             (191,409)            (632,968)
  Cash at beginning of year                       550,025            1,182,993
  Cash at end of year                           $ 358,616           $  550,025


Supplemental disclosures:

Cash paid during the period for interest       $  184,264         $    206,653

Cash paid during the period for income taxes   $   40,500         $        -
Non-Cash Investing and Financing Activities

  Non-cash proceeds received in exchange for
    Assets of discontinued operations:
    Receipt of Convertible Debenture                  -           $  3,400,000
Repayment of Subordinated
   Convertible Debenture                              -           $  2,000,000
     Receipt  of  mortgage receivable                 -           $    275,000
Exchange of employee stock for note
  receivable                                    $   1,000         $     25,550

Increase (decrease) in fair value
Of available-for-sale  securities               $(497,510)        $     58,564


 The accompanying notes are an integral part of these financial statements.

     Initio, Inc.
Notes to the Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Nature of Business
In past years Initio, Inc., (the Company or Initio), through its wholly
owned  subsidiary,  Initio  Acquisition  Corp.  (formerly  called  Deerskin
Trading Post, Inc. Deerskin), primarily marketed leather goods by way  of
the  Deerskin  catalog  and gifts and housewares  through  its  Joan  Cook
catalog.

In April 1999, the Company entered into an agreement to sell materially all
of  the  assets of its Deerskin operation. Since May 1999, when  the  asset
sale  was  consummated, the Company began the process  of  identifying  new
business opportunities including, but not limited to, making an appropriate
acquisition.

Since  the sale of the Deerskin operation, the Company has been seeking  to
make an appropriate acquisition.

Basis of Presentation
The  consolidated financial statements include the accounts of the  Company
and Deerskin. All material intercompany items have been eliminated.

Use of Estimates
The  preparation  of  financial  statements in  conformity  with  generally
accepted  accounting principles requires management to make  estimates  and
assumptions  that affect the reported balances in the financial statements.
Actual results could differ from managements best estimates.

Reclassifications

Certain   items  in  the  prior  years  financial  statements  have   been
reclassified to conform to the fiscal 2001 presentation.

Marketable Securities
The  Company  classifies its marketable securities as either available  for
sale  or  held  to  maturity  in  accordance with  Statement  of  Financial
Accounting Standards No. 115 (SFAS 115). Available for sale securities  are
presented  at their estimated fair market value, which has been  determined
based  upon  security market quotes. Realized gains and losses,  calculated
based  upon  specific identification of shares sold, are  included  in  the
determination  of  Net  Income  (Loss). Unrealized  gains  and  losses  are
included  as  a  component  of  Other Comprehensive  Income  (Loss).   Debt
securities classified as held to maturity are reported at amortized cost.


Fair Value of Financial Instruments
The  carrying amounts reported in the consolidated balance sheets for cash,
accounts payable and accrued expenses approximate their fair value  due  to
their  short-term  maturities.  The amounts presented for  the  convertible
debenture,   notes  receivable,  mortgage  payable  and  the   subordinated
convertible debenture also approximate fair value.




Fixed Assets

Fixed  assets  are  stated  at  cost net of  accumulated  depreciation  and
amortization.   Depreciation and amortization is computed by the  straight-
line method over the estimated useful life of the assets.


Long-Lived Assets
The  Companys  policy is to record long-lived assets at  cost,  amortizing
these  costs  over the expected useful lives of the related  assets.  Long-
lived  assets  are reviewed on a quarterly and annual basis for  impairment
whenever  events  or changes in circumstances indicate  that  the  carrying
amounts  of  the  assets may not be reasonable. Assets  are  evaluated  for
continuing  value and proper useful lives by comparison to expected  future
cash  flows.  Impairments  if  any,  are  recognized  in  the  consolidated
statements  of  operations and comprehensive income (loss)  in  the  period
identified.

Stock Based Compensation
The  Company  continues  to account for its stock  based  compensation  of
employees,  using the intrinsic value approach, described in  APB  No.  25.
The  impact on net income and income per share if the fair value method  of
accounting  for stock based compensation had been adopted would  have  been
negligible. Additional pro forma disclosures as required under Statement of
Financial  Accounting Standards (SFAS) No. 123, Accounting for  Stock-Based
Compensation,  are  presented within these Notes to Consolidated  Financial
Statements.

Earnings Per Common Share
Basic  Earnings  per Common Share, as well as Diluted Earnings  Per  Common
Share  has been computed based upon the weighted average number of actually
outstanding shares of the Companys common stock.  A reconciliation between
the  numerators and denominators of the basic and dilutive EPS computations
for net income is as follows:



                 Year ended April 30, 2001          Year ended April 30, 2000
                 -------------------------------------------------------------

                Income      Shares    Per Share  Income     Shares     Per Share
               (Numerator)(Denominator)Amounts  (Numerator)(Denominator)Amounts
Income from continuing
operations     ($ 525,426)                       $ 973,060

Income from discontinued
operations  net of income
tax (benefit)  (1,580,200)                       1,841,300
              -----------                    -------------
BASIC EPS
Net income from continuing
operations attributable to
common stock     (525,426) 4,645,744 ($0.11)    937,060     4,640,783    $0.21

Net income from
discontinued operations,
net of income tax
(benefit) attributable
to common stock(1,580,200) 4,645,744 ($0.34)  1,841,300     4,640,783    $0.40

EFFECT OF DILUTIVE
SECURITIES
Stock Options                                                     375
Subordinated Convertible
 Debentures                                                   324,675



                 Year ended April 30, 2001          Year ended April 30, 2000
                 -------------------------------------------------------------

                Income      Shares    Per Share  Income     Shares     Per Share
               (Numerator)(Denominator)Amounts  (Numerator)(Denominator)Amounts

DILUTIVE EPS
Net income from continuing
operations attributable to
common stock     (525,426) 4,645,744              973,060    4,965,834
Interest on Subordinated
Convertible   Debentures                           40,000          -
Net income fromcontinuing
operations attributable to
common stock and assumed
option exercises (525,426) 4,645,744   ($0.11) $1,013,060    4,965,833    $0.20
                =========  ==========  ======      ======    =========    =====

Net income (loss) from
discontinued operations,
net of income tax
attributable to common stock and assumed
option exercise(1,580,200) 4,645,744   ($0.34) $1,841,300    4,965,833    $0.37
                =========  ==========  ======    ========    =========    =====

Options to purchase 510,000 shares of common stock out of the total number
of options outstanding as of April 30, 2001 and April 30, 2000,
respectively, were not included in the computation of diluted EPS because
of their anti-dilutive effect.  The conversion of subordinated convertible
debentures to 324,675 common shares as of April 30, 2001 were not included
in the computation of diluted EPS because of their anti-dilutive effect.

Income Taxes
Income  taxes  have been provided using the liability method. Deferred  tax
assets  and  liabilities  are determined based on differences  between  the
financial  reporting  and  tax  basis of assets  and  liabilities  and  are
measured by applying estimated tax rates and laws to taxable years in which
such  differences  are  expected  to reverse.   A  valuation  allowance  is
provided  as  it is not more likely than not that all of the  deferred  tax
asset will be utilized.

Recently Issued Accounting Standards
In September 1998, the Financial Accounting Standards Board (FASB) issued
SFAS   No.   133,  Accounting  for  Derivative  Instruments  and   Hedging
Activities.  The statement established accounting and reporting  standards
requiring that every derivative instrument be recorded in the balance sheet
at  fair  value.   The statement requires that changes in the  derivatives
fair  value  be  recognized  in earnings unless specific  hedge  accounting
criteria  are  met.   Special  accounting for qualifying  hedges  allows  a
derivatives gains and losses to offset related results on the hedged  item
in  the  income  statement.   The  Company does  not  currently  engage  in
derivatives  activity and does not expect the adoption of this standard  to
have  a material effect on the Companys results of operations or financial
position.
In  July  1999, the FASB approved SFAS No. 137, Accounting for  Derivative
Instruments and Hedging Activities-Deferral of the Effective Date  of  FASB
Statement  No.  133,  which amends SFAS No. 133 to be  effective  for  all
fiscal quarters of all fiscal years beginning after June 15, 2000.

2. Discontinued Operations
In  April  1999,  the  Company  entered into an  agreement  with  Americas
Shopping  Mall, Inc. (formerly Advance Medical Sciences, Inc.) (ASM)  for
the  sale of materially all of the assets of its Deerskin operations, which
at  April  30,  1999 were categorized as a discontinued operation.  In  May
1999,  when  the  transaction  closed, the Company  received  approximately
$552,000  in cash, a $3,400,000 convertible debenture of the purchaser  and
discharged  $2,000,000 of its subordinated convertible  debenture,  thereby
reducing  the  principal balance to $1,500,000 resulting in a  gain  before
income  taxes  of approximately $ 2,124,000.  On April 30,  2001  Americas
Shopping  Mall, Inc. defaulted on the payment of interest with  respect  to
the  Debenture  and  consequently the Company has  recorded  a  reserve  of
2,000,000  (before income taxes) as an offset against the gain on  sale  of
Discontinued Operations previously reported.

In  May  1999,  the  Company  sold  its Peabody,  Massachusetts  plant  for
$550,000,  resulting  in  a  gain  before  income  taxes  of  approximately
$206,000.  The  Company received $275,000 in cash and a  15-year  note  for
$275,000, bearing interest at 8% per annum. The note provides for  monthly
installments of principal and interest of $2,708.

3. Marketable Securities
Marketable Securities at April 30, consist of the following:

                            2001                        2000
                   Fair Value  Amortized Cost  Fair Value  Amortized Cost

Available for sale
Securities         2,026,145   2,524,612       2,938,282   2,821,000

Held to Maturity
Securities           300,000     300,000               -           -

                   2,326,145   2,824,612       2,938,282   2,821,000



4.  Fixed Assets
Fixed  assets are recorded at cost and depreciated, using the straight-line
method  over their estimated useful lives, which generally approximates  40
years  for buildings. Leasehold improvements are amortized over the  lesser
of their useful lives or the remaining lease terms.

                                                   2001           2000
                                                  ------         ------
Building and improvements                        $              $2,075,244
Less, accumulated depreciation and amortization                    582,124
                                                ------------   -----------
                                                $          -    $1,493,120
                                                ============   ===========

Vehicles and equipment                                59,222        55,938
Less accumulated depreciation                         38,691        31,783
                                               -------------   -----------
Property and equipment, net                          $20,531       $24,155
                                                ============   ===========

On  May  1,  2000 the Company resolved to sell the building and accordingly
has  reclassified  the net book value of the building and  improvements  as
building held for sale in the 2001 Consolidated Balance Sheet.

5. Convertible Debenture
The  $3,400,000 convertible debenture received in connection with the  sale
of the assets of the Deerskin operations bears interest at a rate of 8% per
annum  on the last day of each July, October, January and April until  June
1,  2004,  when the convertible debenture is to be redeemed  by  ASM.  This
debenture is secured by the intangibles sold by the Company to ASM and  has
a  convertible feature, which allows for the conversion into shares of  ASM
common  stock. The terms of the conversion called for in the debenture  was
$5.50  per  share  (after  giving effect to the 1  for  30  exchanges).  In
December 1999 ASM repaid $400,000 principal amount of the debenture and the
conversion  price was adjusted to $6.00 per share.  This  Debenture  is  in
default  as  of April 30, 2001 and consequently the Company has  set  up  a
reserve of $2,000,000.


6. Income Taxes

The provision for income taxes consist of the following:
The provision for income taxes consist of the following:


                                    For the Years Ended April 30,

                                             2001            2000

Current Taxes Federal                 ($    5,000)      $  44,000
Total Current Taxes                   ($    5,000)      $  44,000

Deferred Taxes - Federal                ($444,966)     ($ 867,000)
Total Deferred Taxes                    ($444,966)     ($ 867,000)


Tax benefit, net                        ($439,966)     ($ 823,000)

Deferred tax assets are comprised of the following:

                                   For the Years Ended April 30,
                         2001                    2000           Change

Net Operating Losses    $1,885,000              $1,262,000      $
Allowance                 (680,000)                      -

Deferred tax assets      $1,237,000             $1,262,000      $

At  April 30, 2001 the Company had Federal net operating loss carryforwards
of  approximately  $3,532,000.  Such losses can be utilized against  future
taxable  income and expire primarily between 2004 and 2020.  Under  section
382  of  the  Internal Revenue Code, these losses may  be  limited  due  to
ownership  changes.   The  Company has recorded a  valuation  allowance  to
reduce its net deferred tax asset to an amount that is more likely than not
to be realized in future years.

7. Mortgage
In  1995, the Company borrowed $ 1,000,000, of which approximately $778,000
was  outstanding at April 30th, 2001. The loan is secured by the  Companys
Carson  City  property, payable in monthly installments, bears interest  at
the rate of 9  %, subject to adjustment in the future, and is due in 2010.
Principal payments approximate $40,000 per annum with a balloon payment  in
the final year.

8. Subordinated Convertible Debenture
In  February  1998, the Company issued $ 3,000,000 principal amount  of  a
five year, 8 %, debenture, which was convertible, at $3.00 per share, into
the  Companys  common  stock. In December 1998, the  Company  issued  a  $
500,000  principal  amount  debenture,  convertible  at  $  1.54  into  the
Companys  common  stock. The conversion feature of  these  debentures  was
greater  than  the  market value at issuance. The $3,000,000  and  $500,000
debentures  mature on May 1, 2003 and December 23, 2003 respectively,  with
all  unpaid principal and interest due.  The Company has a commitment  from
the  same  debt  holder  for  an additional $  1,500,000  to  be  used  for
acquisitions. The conversion price of future borrowings is contingent  upon
the  future market price of the Companys common stock. Two representatives
of  the  debenture  holder  have been elected to  the  Companys  Board  of
Directors. The costs of this debt issuance have been deferred and are being
amortized over the term of the debenture, using the effective interest rate
method.  When the transaction described in Note 2 closed in May  1999,  the
Company  repaid  $2,000,000 of the $3,000,000 debenture and the  conversion
price was changed to $ 2.50 per share.


9. Stockholders Equity
Stock Option Plans
The  Company has two stock option plans, the 1991 Stock Option Plan  (1991
Plan)  and  the  1996 Stock Option Plan (1996 Plan).  Under  both  Plans
options  to  buy  the  Companys common stock  have  been  granted  to  key
employees and/or directors of the Company, for terms ranging from  five  to
ten years and which become exercisable at fixed times.



Options,  which may result in the issuance of up to 500,000 shares  of  the
Companys common stock, may be issued pursuant to the 1996 Plan. Under  the
1996  Plan  the  Company may award either Incentive Stock  Options  or  Non
Qualified  Stock Options.  The terms for either may not exceed  ten  years,
while  vesting  is  either  20 % annually or  as  the  Companys  Board  of
Directors  provides. Exercise prices approximate the market price  for  the
Companys  stock, except that in the case of award to holders of more  than
10  %  of  the  Companys stock the exercise is to be set by the  Companys
Board  of  Directors. Arising from the disposal of its catalog  operations,
the  Company decided that all employees of Deerskin, who had stock  options
on  shares of Initio common stock and did not continue in the employ of the
Company shall be fully vested effective upon the closing of the transaction
between Deerskin and ASM. All such persons had one year from April 30, 1999
to exercise such options.  As of April 30, 2000 all unexercised options for
these  former employees expired.  Activity for the Plans is as follows  for
the years ended;


                                     Year Ended              Year Ended
                                 April  30th, 2001       April  30th, 2000
                                 Options  Average Price  Options  Average Price
Outstanding at beginning of year 511,000       $1.94     591,442        $1.93
Granted                                                   10,000         1.25
 Exercised                        (1,000)     ($1.00)    (51,915)        1.79
 Expired                                                 (38,527)        1.83
                              -----------    -------     --------     --------
Outstanding at end of year       510,000        1.94     591,442         1.93
                               =========      ======    =========       =====

                            Options Outstanding
                            At April 30th, 2001

Exercise Price      options   expires in     exercisable
------------------- --------- -------------- ---------------
     1.25            10,000      2010           2,000
     1.95           500,000      2008         400,000
                    510,000                   402,000
                   ========                  ========

As  a  result of the 1991 and 1996 Plans, had the Company adopted the  full
value  approach  to  accounting for employee stock options,  the  Companys
results of operations would have been for the years ended:

                              April 30, 2001           April 30, 2000
                              ------------------       -----------------
Net income (loss) As reported ($2,105,626)               $ 2,814,360
                  Pro forma                                2,787,599
Income(Loss) Per Share:
Basic:            As reported       $(.45)                    $.61
                  Pro forma         $                         $.60
Diluted           As reported       $(.45)                    $.57
                  Pro forma         $                         $.56

The  foregoing disclosures have been computed using the Black Sholes option
pricing model with the following weighted average assumptions:



                                   2001           2000
                                   -------        -------
Risk free Interest Rate              5.63%          5.63%
Expected Lives                      4 year         4 year
Expected Volatility                    50%            50%
Expected Dividend Yield                 0%             0%


10. Lease Agreements
The  Company  has future minimum rental payments of $25,200  (approximately
$700  per  annum) under a ground lease that expires in 2037 on  its  Nevada
facility.

The  Company entered into a one year lease agreement for its administrative
office  which  began  in August, 2000 and provides  for  an  annual  rental
expense of $35,000.

11. Legal Proceedings
In  November  2000  the Company learned that a default  judgment  had  been
entered  against  Deerskin  Trading Post, Inc.  The  Company  has  retained
council  and  is seeking to have that judgment vacated.  There  can  be  no
assurance  that the judgment will in fact be vacated and if it is  not  the
Company may be liable for somewhat in excess of $200,000.



                         Exhibit 27

This  schedule  contains summary information extracted from  the  Companys
audited  financial statements and is qualified in its entirety by reference
to such financial statements.

Period                        12 months           12 months
Fiscal Year End               April 30, 2001      April 30, 2000
Period End                    April 30, 2001      April 30, 2000
Cash                               $ 358,616           $ 550,025
Securities                         2,326,145           2,938,282
Receivables                             -                   -
Allowances                              -                   -
Inventory                               -                   -
Current Assets                         n/a                 n/a
Property, Plant and Equipment         59,222           2,131,182
Accumulated Depreciation              38,691             613,907
Total Assets                       6,960,313           9,738,656
Current Liabilities                    n/a                 n/a
Bonds                              1,500,000           1,500,000
Preferred                               -                   -
Common                                50,536              50,526
Other Stockholders Equity          4,459,882           7,180,267
Total Liabilities & Stockholders   6,690,313           9,738,656
Income                               652,163           1,061,115
Cost of Goods Sold                      -                   -
Other Expenses                       544,025             676,812
Interest Expense                     193,598             234,543
Net Income (loss)                 (2,105,626)          2,814,360
Basic Earnings Per Share               (.11)                .61
Diluted Earnings (loss) Per Share      (.34)                .57